Navy Buys Biofuels for $15 Per Gallon From Stimulus-Linked Firm

A California company has been hired to provide 450,000 gallons of advanced biofuels to the U.S. Navy – the “single largest purchase of biofuel in government history,” according to the Navy – at $15 per gallon, or about four times the market price of conventional jet fuel.

Last week, the Navy signed a contract with two biofuel companies to purchase 450,000 gallons of advanced biofuels at $12 million to assist in President Obama’s goal to establish a domestic biofuels industry and to advance it in ways that do not require Congressional approval. Of course, given the Navy’s mission, they claim to be pursuing biofuels to ensure adequate fuel in the future without relying on crude from the Middle East or other overseas sources that may be a threat to our national security. While this purchase is only a drop in the bucket compared to the Navy’s annual usage of more than 670 million gallons, their goal is to fuel a normal Navy mission with a 50-percent blend of biofuels and gasoline by 2016.

The company selling the fuel to the Navy is called Solazyme. The company’s corporate board includes “strategic advisor” T.J. Glauthier, who “advises companies dealing with the complex competitive and regulatory challenges in the energy sector today.”

Glauthier was the Deputy Secretary and Chief Operations Officer of the Department of Energy from 1999 to 2001, meaning he has experience dealing with energy issues on both sides of the regulatory equation.

Also of note: Glauthier served (pro bono) on President Obama’s White House Transition Team, where he specifically worked on the energy provisions of the stimulus package, according to Solazyme’s website. Solazyme itself landed a $21.8 million stimulus grant to build a biofuel refinery.

Now the company looks to have scored big once again. But the benefits extend beyond the immediate profit to be made from the sale. As Wired Magazine noted, “the often-struggling biofuels industry will be a lot closer to proving its viability” with Solazyme’s massive Navy contract.

“Our use of fossil fuels is a very real threat to our national security,” the Navy insisted in defending the purchase, apparently in reference to the supposed limits on fossil fuel availability. But as IER noted, the United States sits on enough oil and natural gas to power the country for hundreds of years – if only the federal government would permit expanded exploration and development.

The administration seems to be looking for ways to push alternative fuels without congressional action, and the military is the logical place to start. Heritage research fellow Jack Spencer noticed the trend earlier this year: “The Pentagon and the environmental movement seem to have found common cause by linking America’s national security to the basic tenets of the President’s green agenda,” Spencer noted. “Unfortunately, there are real costs for national security, energy technology, the taxpayer, and the American consumer.”

Government efforts to prop up favored industries also tend to benefit the politically connected. Solazyme certainly fits the bill.

There are any number of start up companies that are working on this issue. Aeon Fuels of Foley, Alabama is one that is working on a process that will produce Jet fuel from tires. Preliminary testing is very promising with greater BTU's and less weight being achieved than conventional fuels currently attain. http://www.aeon-fuels.com

There is no such thing as Fossil Fuels, that was Junk Science to begin with. Look at all those planets in our Solar System chock full of hydrocarbons! Did they have dinosaurs on Uranus? No. Oil is not a threat to our planet and Oil is not a Fossil Fuel. Oil comes perpetually from the Mantle. Sixteen dollar a gallon gas going to the Navy is a compound abomination. Those Corn Ethanol subsidies are paying people to burn food while the price of food is skyrocketing! Meat producers need that corn! Idiots!

A Thomas Gold believer, obviously…. Interesting stuff it is, but so far, most of the oil we use is found in sedimentary formations, and it's believed it is from decomposition of microscopic marine life, not from dinosaurs. Dinosaurs would not have provided enough biomass, for one thing. Whether there is usable oil on Uranus doesn't do the Defense Dept. any good, and it's smart for them to contract this fuel source, since this will help develop such providers of alternative fuels into viability, in case of war, where our oil reserves are most likely to be withheld from us. It's not a matter of "Drill, baby, drill,", although this whole article and the threads with it imply that. Aviation fuel is the only fuel so far that has the portability and the energy density to use on aircraft.

The idea that we're sitting on hundreds of years worth of oil reserves is technically true, maybe, but after we're done extracting it, what a mess! And the energy required to extract a large part of it exceeds the energy it would yield, at least with current technology. Synthezing it directly with solar energy may not be feasible on a large scale, either, but from this view point, it looks at least as attractive as digging up the states of Colorado and Wyoming and beyond.

Yes we are sitting on hundreds of years worth of oil. And NO it will not be a mess. We have advanced so much with technology that it will be very kind to mother earth. Synthezing isn’t fesible period. I am so sick of this! Get a clue and educate yourself.

Virent of Madison, WI received $13 million earlier this year to employ its patented catalytic process in the conversion of corn stover to jet fuel. I wonder how many more green businesses are feeding at the trough.

Nobody should be surprised by this. The green mandates are more social engineering by the left. They say that the batteries in the hybrids don't work below 32 degrees, that will not work here in wisconsin. All this is .. is they pick the winners again.

The price for the biofuel itself in this contract is actually $26 per gallon ($12M for 450K gal) and is more than 8 times the current rate for conventional JP-8 jet fuel and F-76 diesel oil (both less than $3 a gallon to the military in bulk). Even so, this price is a huge deception. DOE is separately subsidizing Solazyme for the algae fuel to the tune of $21 Million. USDA is also pumping in money via subsidies and loan guarantees. To get an idea of the real price, Honeywell UOP just won a DOE contract for $1.1M to produce 100 gallons of fuel-that's $11,000 a gallon. This is how the Administration and the Navy are spending our tax dollars while carrying a $15 Trillion debt and cutting defense.

Hey Leon, why don't you educate yourself before you speak. Obviously you don't know what Solazyme makes their fuel out of. You'll need more than one guess because it isn't corn. Please stop speaking when you have no idea what you are talking about.

Hey Charlie at $26.66 per gallon who cares what they make it from, it's just another socialist, do good, feel good, moronic idea. The market will tell you when it's economically viable, not some never signed a check on the front political appointee..

This is about preventing another Obama green energy failure. (solyndra) The company cant exist in the real world, Obama cant take another giant failure with the election coming up so they bought a crap contract to keep this pie in the sky business afloat until after the election. Its just politics and people spending your hard earned and taxed money for their own devices.

Whatever happened to the guys making diesel out of used cooking oil and other trash? You'd think the enviro-mentalists would be all over that one!
Wait, maybe their comapny didn't get the memo about having to make campaign donations. Somebody clue them in please, and hurry! This crap is getting ridiculous.

Even if the average person doesn't realize it, the Navy knows we're going to run out of oil eventually, and wisely they're getting ready — as are several airlines. As feedstocks, capacity, and demand increases, prices of biofuels will come down — and meanwhile the price of gas will increase because of dwindling supplies of oil. I don't know why people think we have an unlimited supply of oil — we don't.

Incidentally, the real cost of gasoline in the US ranges between about $10 and $15 per gallon, but various subsidies keep the price lower.

The Defense Department, meanwhile, also knows that climate change is a national security threat. (Google "DOD on global warming" to find references to support this.) Biofuels are carbon neutral, so at least the greenhouse gases they produce will be reabsorbed.

Isn't it nice that we have uber-intelligent people such as Ruffy to tell the rest of us neanderthals, that we will soon run out of that $10 to $15 subsidized oil.

There is just no doubt that the East Angola grant seekers would like us all to believe in their man-made global warming fable. How else could these Einsteins justify stealing taxpayers money to fund these pocket lining larks.

so…………hmmmm.let me get this straight. Biofuels are (Carbon Neutral?) That is an overstated bunch of bull. It still produces carbon. so the problem is the Al Gore maniacs that propogate this lie again and again and rename it just as we start to figure it out. Global warming….woops we mean Climate change…woops we mean…. This shell game works just fine for dumbed down societies. Not for free thinking intelegent people. It's time for a revolution. GO RON PAUL!

Cliff Claven was being kind with his estimate, when doing the math it really works out to $26.67/Gallon. I appreciate his comparison to the Navy's current fuel costs. I would like to add another comparison, this is well over 6 times the cost of going out and purchasing the fuel at the local brand name gas station, paying full retail prices including all federal and state taxes! I can NOT see how the Navy can afford this kind of waste, especially with the looming defense cuts!

This Eco Green craziness has to stop. The Country cannot afford another $200 hammer procured by the armed forces, never mind bio-fuels at $15/ gallon or as Cliff Claven rightly points out it's really $26 per gallon
Cliff Claven Says:
This contract is actually $26 per gallon ($12M for 450K gal) and is more than 8 times the current rate for conventional JP-8 jet fuel and F-76 diesel oil (both less than $3 a gallon to the military in bulk). Even so, this price is a huge deception. DOE is separately subsidizing Solazyme for the algae fuel to the tune of $21 Million. USDA is also pumping in money via subsidies and loan guarantees. To get an idea of the real price, Honeywell UOP just won a DOE contract for $1.1M to produce 100 gallons of fuel-that's $11,000 a gallon. This is how the Administration and the Navy are spending our tax dollars while carrying a $15 Trillion debt and cutting defense.
I'm discussed with this Obama administration allowing such wonton waste when our Country is in such dire financial straights!

This is how the Democrats will gut the military, regardless of the funding actually provided for our National Defense. Just spend that on enviro pet projects that they could not get funded from Congress, and voila – politically connected paybacks and a hollow military. A democrat dream!

This goes right up there with me paying taxes to subsidize auto companies that pay there workers the equivalent of $73 per hour (Including Benefits) while my business and its employees continue to struggle. When will this madness ever end!!!

Someone pinch me…"at $15 per gallon, or about four times the market price of conventional jet fuel"? Where in the military budget is some $12M coming from? Oh Hell No! Talking about trying to sneak is the back door.

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